India’s projected 6.5% growth shows resilience, but target is 7-8%, says CII chief Sanjiv Puri

“While [India’s economic growth] is lower than last year, it must be seen in context. We are not insulated from the rest of the world. The fact that we can still deliver such numbers demonstrates the underlying strength of our economy,” Puri said.

“The resilience has come from years of structural reform—rationalisation of income tax, GST implementation, investment in physical and digital infrastructure, and a strong foundation for manufacturing. These cumulative reforms have strengthened our economic base,” he added.

Downgrades

Last month the International Monetary Fund (IMF) lowered India’s FY25 growth forecast to 6.2% from 6.5%, citing global trade concerns amid the US tariff war. The IMF now projects global GDP to expand by 2.8% in 2025 and 3% in 2026, down from the 3.3% forecast for both years in its January 2025 update. Similarly, the Reserve Bank of India (RBI) has also recently revised its India estimate to 6.5% from 6.7% due to policy and trade uncertainties.

Also read: Indian economy posted its best performance in a year in March: Mint tracker

Despite this, the Economic Survey 2024-25 projects FY26 growth at 6.3-6.8%, driven by robust rural demand, services, and manufacturing, reaffirming India’s position as the fastest-growing major economy.

Puri said the key pillar of India’s next growth phase will be deeper integration with global trade as nearly 70% of world trade is now part of global value chains. “India must position itself within these networks. Bilateral trade agreements are key to achieving this,” he added.

‘Reshaping India’s role’

Puri said with improvements in physical and digital infrastructure, and rising investor confidence, India is positioning itself as a resilient and competitive hub. “These trade agreements are not just about numbers. They’re about reshaping India’s role in the global economy. We are creating conditions for a new supply chain ecosystem—one complementary to, and not dependent on, China,” he said. “What comes next is critical: innovation, jobs, and value addition. That’s the big-picture trajectory we must stay focused on,” he added.

In April, the US imposed a 27% reciprocal tariff on Indian goods, citing India’s average 52% duty on US imports, as part of a broader strategy to address trade imbalances. However, the US later reduced the tariff to 10%, providing temporary relief to India and other partners.

Free trade agreements

India and the United States are currently negotiating a comprehensive trade agreement to reduce tariff disparities and boost bilateral trade, with both sides aiming for a conclusion by fall.

India and the United Kingdom also recently finalised a free trade agreement, targeting $120 billion in bilateral trade by 2030. India is also in talks with the European Union for a trade agreement.

Also read: Gains and giveaways from the India-UK free trade agreement, in 5 charts

Puri said the proposed FTA with the UK is comprehensive, spanning manufacturing, services, and parts of agriculture, and is expected to give India preferential access to about 95% of the UK market for manufactured goods. “Ultimately, the free trade agreements must be viewed holistically—not just in terms of merchandise trade, but across the broader spectrum of economic engagement,” he said. “Done thoughtfully, these agreements can position India as a key global player in both goods and services,” Puri added. He said he would like to see a comprehensive trade deal with the US.

Private capex

Meanwhile, on private sector capex, Puri said forward-looking government surveys indicate positive momentum and traction across sectors such as transport, energy, chemicals, metals, and hospitality. “All indicators are pointing in a favourable direction,” he added.

On the government’s push for deregulation, Puri said unlocking growth requires streamlining regulatory processes, particularly simplifying steps to set up manufacturing units, from approvals to land acquisition.

While the national single window system by DPIIT is a step forward, its effective implementation at the state level and attention to enforcement, certifications, and inspections are essential to accelerate industrial expansion, he added.

Also read | A private capex slump: An imperfect but indicative survey points to one

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